Fibonacci Calculator - A Powerful Technical Tool

It is commonly observed that prices tend to correct at either the 50% or 61.8% Fibonacci retracement level before resuming the prevailing trend. As such, traders could use the levels as the main pullback references during a strong trend.

Continue Reading at 5 Pullback Trading Strategies to Try

In financial trading, we don't use Fibonacci numbers as it is but based on the distance between the numbers in the series. For example, dividing 89 in the Fibonacci sequence by the following 144 will result in 0.6180 (61.8%). Furthermore, if the number 89 is divided by the second number after it in the Fibonacci sequence, it will come out as 0.3819 (38.2%), and so on.

Based on these rules, we acquire Fibonacci Retracement levels and Fibonacci Extension levels which can surprisingly explain price movements when applied to the price chart. Therefore, Fibonacci is also used in forex trading as a technical analysis tool.

Continue Reading at Learn How to Use Fibonacci in Financial Trading

1. Identify where prices move. For example in the picture below, it seems that prices are going down (bearish). In this situation, traders will look for opportunities to sell when prices temporarily retrace higher.
2. Mark the horizontal lines where Fibonacci Retracement 23.6% (0.236), 38.2% (0.382), and 61.8% (0.618) are located. These lines are used to identify levels where prices are more likely to reverse.
3. Observe close prices on the candle that represents price movements near the aforementioned Retracement levels. When prices have risen up to Fibonacci levels of 0.236, 0.382, or 0.618, take note of where the next candle closes. 

Continue Reading at Learn How to Use Fibonacci in Financial Trading

The Fibonacci series of numbers was described by Leonardo Pisano (1175-1250), an Italian mathematician, in his book "Liber Abaci" or Book of Calculation. The French historian, Guillaume Libri, nicknamed him "Fibonacci" - short for "filius Bonacci" ("son of Bonacci") - because his father's name was Guglielmo Bonacci. This name later became so well-known that people called him Leonardo Fibonacci, and that is also the reason why "Fibonacci" is used as the title for the numbers he describes.

The Fibonacci numbers themselves were not actually discovered by Leonardo "Fibonacci" Pisano, but have long been discussed by Indian mathematicians, especially in connection with the Sanskrit prose system. However, Leonardo was the first to introduce this series of numbers in the book "Liber Abaci" to the Western world; along with the arithmetic systems we know today, such as the concepts of blanks, commas, decimals, and fractions.

Continue Reading at Learn How to Use Fibonacci in Financial Trading